Money saving tricks that you must know

Prioritising savings is an essential step to ensure financial security. However, most of us do not save as much as we would want to while some of us do not have the required surplus. At times people choose to meet their needs at hand and put off savings for the future. However, spending sensibly and saving regularly is a good way to keep your finances safe.

Here are some simple tricks that will help improve your savings rate and build up a secure financial status.

An annual increment or a bonus might sound like a lucrative reason to spend the extra amount on luxury but, investing a major portion of the raise is a more sensible option to ensure financial security. Investments like SIP in a mutual fund or a recurring bank deposit wherein the amount gets deducted from a person's bank account automatically at the beginning of the month are good options.

Keep separate accounts, one that will manage your investments and savings and one for your daily expenditures. Do not use the debit card of the account wherein you are depositing your savings. This way all your savings will be secured at one place and you will be able to manage your money better.

Every time you spend on a luxury item, keep aside the same amount in your savings. It will also help to monitor your expenses since your liquidity reduces every time you spend. This might finally discourage you from splurging and help your savings to grow.

When your EMIs are about to end, plan where you would want to invest this amount to effectively channelise your surplus into savings. This way your monthly outflow of money will remain the same but your savings will get a boost.

Locking your money in long-term investment schemes like Public Provident Fund (PPF), National Pension Scheme (NPS) or insurance policies which does not allow early withdrawals is a good way to remain invested and manage your savings for a long time.

Involving a person, be it a close friend or relative, can help you to keep up with your saving decisions. Both of you can compete with each other to see who saves the maximum. Alternatively, they can act as your motivator and keep tabs on your spending and saving.

Before making a decision to purchase something, take some time off and think about whether or not it is essential for you. Weigh the importance of the purchase with the price to be paid for it and chalk out the pros and cons.

You don't really think about saving for your retirement from a young age but it actually helps you to realise how deviant are you from your goals and how much you need to save to make them happen.